China Aviation Law
26Sep/10Off

Virtual Airlines

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This was a very interesting article on the Yichun crash. What amazes me is that the crew was willing to make this flight with little experience, low ifr, and having never flown the route before. This is an example of how poorly the Chinese pilots are trained.

While other airlines had already cancelled evening services from Harbin to Yichun, an airline captain from Henan Airlines attempted to fly the route for the first time on August 24. The plane ended up crashing as it attempted to land at Yichun's small Lindu airport, the crash claimed the lives of 42 passengers and another 54 were injured.

According to a security report of the Heilongjiang branch of Southern Airlines released in August 2009, due to seasonal weather conditions and the location of the newly-constructed Yichun Lindu Airport, they concluded that it was not safe to offer night flights along the route. Southern Airlines decided that, as of September 1 that year, they would no longer fly the route at night.

However, at 20:51 on August 24, Qi Quanjun, a pilot with Henan Airlines took off in an E-190 aircraft, this was Qi's first flight along the route. When coming in to land at the Yichun airport at about 9.30pm in poor conditions that reduced visibility to less than 300 meters, the plane crashed 690 meters short of the runway. According to the official government report, 42 passengers died and another 54 were injured in the crash. The pilot was badly injured but did not die. Many of the original media reports stated that 43 passengers had died, but authorities have since confirmed that only 42 people died in the crash.

Source: http://www.eeo.com.cn/ens/Industry/2010/09/03/179870.shtml

The problems of the regional airlines in the US are only compounded by corruption, poor experience and young mangers in China. Henan Airlines is a prime example of this. It looks like the president of the company, who has now be removed / arrested for embezzlement from Shenzhen Airlines, used the company as his personal money laundering vehicle.

23Sep/10Off

Families of victims in Yichun air crash to sue GE

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"Families of victims in a recent air crash in northeastern China are planning to sue the General Electric Co (GE) for the US conglomerate's role as engine maker in the fatal accident, a lawyer said Thursday.

Wang Xinquan, with the Beijing Guo & Partners law firm, told the Global Times that more than 10 families of victims in the crash in Yichun have expressed their intentions to lodge a lawsuit against GE through his firm.

"The crashed aircraft was made by the Brazilian manufacturer Embraer. But its CF34-10E engine is a GE product. According to US law, if … the design or quality of the engine is related to the air crash, GE must be liable for compensation," he said."

Source: Global Times - http://china.globaltimes.cn/society/2010-09/574391.html

I think it'll be a hard case to show that the engines had any cause to this accident. The more interesting case will be against Embraer. Many of these 170/190s are built in China at their Tianjin factory. If the aircraft did breakup in flight, it could be from shoddy Q/A in the factory.

I am glad that not all of the victim's families settled.

21Sep/10Off

Homemade Aircraft in Chongqing

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Zeng Qiang, who makes a living by performing at wedding celebrations and funerals in his neighborhood, sits by his handmade plane in Sifang village, Shuangqiao district, Southwest China's Chongqing municipality, Sept 19, 2010. Zeng, 24, a middle school dropout and father of a 2-year-old boy, became interested in airplanes 10 years ago and has since spent most of his spare time studying model planes. The 150-kg plane, 6 meters in length and 9 meters in height, cost Zeng nearly one year to build and is expected to be airworthy by Sept 25, after the engine is installed. The plane will be displayed at an aircraft show in Chongqing as the only homemade aircraft. He said his little son is his biggest fan and the boy's toys are all model planes.

Is there any regulatory agency in China that is supervising homemade aircraft? Where is the EAA China chapter?

13Sep/10Off

Land Use Right in China and Long-Term Ground Leases – 中国的土地使用权与外国的长期土地租约

Chinese Eviction Notice

Land Use Right in China and Long-Term Ground Leases

While granted land use rights (LUR) in China are analogous to long-term ground leases (LGL) used in the United States, the United Kingdom and Hong Kong, they ultimately have fundamental differences. Unlike LGL, LUR are restricted in use, term, transferability and origin.

There are a few similarities between LUR and LGL. Both separate the ownership of the land from the ownership of the buildings constructed on the land. In the case of LUR, the government retains ownership of the land, while the party has term-limited ownership of the improvements on the land. Gregory M. Stein, Mortgage Law in China: Comparing Theory and Practice, 72 Mo. L. Rev. 1315, 1352 (2007). In the case of LGL, the lessor retains ownership of the land, while the party has term- limited leasehold ownership of the ground and improvements. 31 C.J.S. Estates § 197 (2010). In both cases, the use is limited to a specific period of time. With LUR, the term is determined by the use of the property - between 30 and 70 years. Dale A. Whitman, Chinese Mortgage Law: An American Perspective, 15 Colum. J. Asian L. 35, 38 (2001). The term of LGL is determined by the contracting parties and are generally between 50 and 99 years in length. Peter A. Sarasek, Commercial Real Estate Lending: Mortgages and Beyond, in 543 PLI Course Handbook, Commercial Real Estate Financing 2006: What Borrowers & Lenders Need to Know Now 177, 186 (2007).

Aside from the above similarities, LUR and LGL have some fundamental differences. In general, LUR are significantly restricted by the Chinese government. LGL can be acquired from one of many kinds of lessors - be it a private party, corporation, charitable organization or government entity. Pamela L. Westhoff, Ground Lease Financing: A Framework for Ground Lessor Considerations, in 535 PLI Course Handbook, Commercial Real Estate Financing 2007: What Borrowers & Lenders Need to Know Now 279, 283 (2007). In contrast, LUR may only be granted by the Chinese government. Whitman at 38. LUR are limited to certain kinds of use and development. Id. LUR must be developed within a fixed amount of time or risk forfeiture. Stein at 1352. Finally, under Chinese law, LUR are not considered leases, and not subject to landlord-tenant law. Whitman at 38.

The holder of a land use right has limited rights of transferability. The holder may not register the right until it has been paid in full. Stein at 1322. The right cannot be held for speculation and may not be transferred until it has been developed. Patrick A. Randolf Jr., The New Chinese Property Law, Probate and Property, Oct. 21, 2007, at 16. Finally, “in some parts of China, the purchaser apparently may not use borrowed funds for the acquisition of a land use right.” Stein at 1323. However, it should be noted that after the land has been developed, the holder gains ownership rights that are similar to LGL. The right can be transferred, leased, and mortgaged without state approval, and if the right is revoked, the holder is entitled to compensation. Whitman at 38.

Finally, LUR and LGL differ in their financing and use. LGL are often a financing vehicle for land developers. Stein at 1352. They provide the lessee or developer with a way to avoid up-front land acquisition costs. Id. In contrast, the holder of LUR must pay the entire fee in advance of development. Id. “The developer must incur the capital expense of acquiring the land use right in its entirety at the beginning of the construction process.” Id.

This has created an uncertain market for credit securities based on LUR. One author has suggested that LUR may see a steep decline in value as they approach the end of their term. Whitman at 39. This is very similar to LGL which also see steep declines in value as they approach their termination date. Id. However, as many of the LUR have yet to approach that point, the legal community remains speculative as to the government's future response. Id. In the meantime, the Chinese government has created some rules to govern the leasing, mortgaging and sale of LUR. Patrick Randolph, Ownership with Chinese Characteristics: Private Property Rights and Land Reform in the PRC, Cong.-Exec. Comm. on China Issues Roundtable, Feb. 3, 2003, http://www.cecc.gov/pages/roundtables/020303/randolph.php (last visited Aug. 15, 2010). These rules strictly control how much may be lended against the value of the land and restrict leases to no more than 20 years. Id.

While LUR and LGL share some similarities, LUR are considerably more restricted by the Chinese government than LGL are restricted by their respective countries. Unlike LGL, LUR are restricted in use, term, transferability and origin. While LGL can defer land acquisition costs for developers, LUR present a heavy initial financial investment for developers in China. Finally, while there are some similarities, LUR are not leases, not subject to landlord-tenant laws, and ultimately, very different from LGL.

13Sep/10Off

First Chinese female judge sworn in at ICJ

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Xue Hanqin is sworn as a judge of the Hague-based International Court of Justice (ICJ) on Monday.  [Photo/Xinhua]

THE HAGUE - Xue Hanqin was sworn in Monday as a judge of the Hague-based International Court of Justice (ICJ), becoming the first Chinese woman to get the job.

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Another female judge, Joan E. Donoghue from the United States, assumed office together with Xue.

"It is the first time in the court's history that two female judges will serve simultaneously," the ICJ said in a statement.

Almost all ICJ judges had been male with only one exception -- British Dame Rosalyn Higgins, who served on the court from 1995 to 2009.

Xue, a veteran Chinese diplomat and an expert of international law, was elected to the ICJ with all 15 votes in the Security Council and a majority of votes in the UN General Assembly in June. She is the third Chinese judge in the Court.

"More and more women take active part in the major international justice organizations, which marks the improvement of civilization," Xue told Xinhua.

Xue is no stranger to the Dutch city. She used to serve as Chinese ambassador in The Hague.

"What is remarkable about the two new judges is not just that they will bring down the average age of the members of the ICJ," Dr. Olivier Ribbelink, senior researcher at T.M.C. Asser Institute commented, "but also, strangely enough, that they are women."

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